The truth about China

The Prime Minister Narendra Modi is presently visiting Bishkek, Kyrgyzstan to attend a meeting with Chinese President Xi Jin Ping and other leaders on the sidelines of the Shanghai Co-operation Organisation.

Justice Markandey Katju

The Indian leader has met the Chinese leader often in the past in an effort to improve relations between the two countries, but I submit that certain realities seem to have been overlooked by the Indian side. To understand this one must know that China of today only pretends to be a communist country, but in fact it is capitalist.

It is in the nature of capital to seek avenues for profitable investment, markets to capture, and cheap raw materials to obtain. After its industrialization has developed to a certain level a country turns imperialist, that is, it seeks overseas markets and raw materials. That is why England conquered India and France conquered Algeria and Vietnam. In the 1930s and 1940s Nazi German imperialism was the real danger to the world, and not British or French imperialism.

This was because German imperialism at that time was rising and expanding, and hence aggressive imperialism, while British and French imperialism were on the defensive. While the latter only wanted to hold on to their colonies, the Nazis wanted to conquer and enslave other countries. Hence the Nazis were the real danger to the world.

Similarly, today the danger to the world is not from America or Europe but from China, because the Chinese are on the road of aggressive expansionism in the world. With their massive industry seeking markets for its goods and cheap raw materials, and with their huge 3.2 trillion dollar foreign exchange reserve hungrily seeking avenues for profitable investment, the Chinese are today aggressive imperialists and the greatest danger to the world.

It is true they are not presently expanding militarily like Nazi Germany, but they are aggressively expanding economically by penetrating and undermining the economies of many countries of the world. In the last decade, Chinese overseas investment has skyrocketed. Today the Chinese are almost everywhere, Asia, Africa, Latin America, and of course USA and Europe.

Their Belt and Road Initiative is a network of roads, railways, oil pipelines, power grids, ports and other infrastructure projects connecting China with the world. It aims at improving infrastructure and connectivity between China and the rest of Eurasia in order to dominate it. China’s focus is often on vital infrastructure like ports e.g. Gwadar in Pakistan, Piraeus in Greece, and Hambantota in Sri Lanka, the aim being to get a strategic foothold in these countries.

By selling goods at less than half the price at which the American or European manufacturer can afford to sell (in view of his higher labor cost), the Chinese have destroyed many American and European industries. Now the Chinese are seeking to capture the markets and raw materials in underdeveloped countries by dumping goods at very low prices so as to make the local product uncompetitive.

Pakistan, for instance, is flooded with cheap Chinese goods. While capturing foreign markets, the Chinese were carefully protecting their own by high tariffs. It has to be said to the credit of President Trump that he has called the Chinese bluff, and bluntly told the Chinese that this won’t do. You can’t have 25 percent tariff on import of automobiles into China when USA imposes a tariff of only 2.5 percent for import of cars into USA.

Trump has imposed tariffs on several Chinese goods and has announced more in the future. To this, the Chinese announced retaliatory tariffs, but that will hurt Americans little. It is well known that the Chinese have no business ethics, and that is why many American and European companies are reluctant to hire Chinese from mainland China as they often commit espionage of industrial secrets. Since I am an Indian, I would like to refer to China’s economic relations with India.

As is well known, India was a Brtish colony till 1947, and the British policy was broadly to keep India unindustrialised. However, after Independence, a certain degree of industrialization took place in India and we started manufacturing goods which we had to earlier import. Now the Chinese have, to a certain extent, penetrated our market at the expense of our domestic industries. An article entitled ‘ How Chinese companies are beating India in its own backyard ‘ published on 12 December. 2017 in The Economic Times gives some interesting details. Indo-Chinese trade is heavily skewed in favor of the Chinese.

Indian exports to China are of 16 billion dollars, mainly of raw materials. But its imports from China are of 68 billion dollars, mainly of value-added goods like mobile phones, plastics, electrical goods, machinery and its parts. This is typical of the relation between a colony and an imperialist country. Chinese companies use aggressive pricing, state subsidies, protectionist policies and cheap financing.

In certain sectors, Chinese companies dominate the Indian market e.g. in the telecom sector, 51 percent of which has been captured by the Chinese. Indian homes are full of Chinese goods e.g. fittings, lampshades, tube lights, etc. now the Chinese want to go further. Their companies like Huawei, ZTE, Lenovo, Xiaomi, CSITEC, CMIEC, Haier, TCL, Jiangsu Overseas Group Companies and FiberHome Technologies are aided by the Chinese government and aggressive diplomacy to spread all over the globe.

These companies are in high tech, intercom, computers, metallurgy, steel, etc and have deeply penetrated India. Those who think that the Chinese danger can be averted by sweet words and cajoling fail to understand the nature of Chinese imperialism, based on certain iron objective economic laws which operate irrespective of one’s subjective personal wishes.

To keep thinking that one can improve relations between India and China is just wishful thinking. It is like imagining that a fox and a chicken can coexist in the same pen. To ignore this danger will be behaving like an ostrich, like Neville Chamberlain who kept thinking that Hitler was no danger until it was almost too late. The Chinese of today are like ravenous wolves, and only if the countries of the world realize the danger and put up a stout united opposition to them that they can be stopped from swallowing up other nations.

[Justice Markandey Katju is former Judge, Supreme Court of India and former Chairman, Press Council of India. The views expressed are his own]